Break-even is how many units you need to sell in a month for what each sale leaves you to pay all your fixed costs. Enter your fixed costs, your price, the variable cost per unit and the days you open: the calculator tells you how many plates, coffees or boxes you need per month and per day to stop losing money.
How it works
Every sale leaves a contribution: what is left of the price after sales tax, the channel commission and the cost of making that unit.
- Price before tax = price ÷ (1 + tax rate). With no tax, it stays the same.
- Contribution per unit = price before tax − commission − variable cost. The commission is worked out on the price the customer pays.
- Units per month = fixed costs ÷ contribution per unit, rounded up.
- Per day = units per month ÷ days open, rounded up.
- Sales per month = units × price. This is what has to come through the till.
If contribution comes out at zero or below, the tool says so: every sale loses money and no number of sales fixes it. The price or the cost has to move first. To sort which costs are fixed and which are variable, see the guide to fixed vs variable costs.
Worked example: a small coffee bar
You run a coffee bar. Fixed costs come to $3,200 a month: rent $1,500, a part-time barista $1,100, power and water $250, insurance, card reader and phone $200, accountant and software $150. Your flat white sells for $4.50 and costs $1.35 to make: coffee $0.40, milk $0.45, cup, lid and sleeve $0.35, sugar, napkins and stirrers $0.15. Your prices are before tax and you open 26 days a month.
| Step | Sum | Result |
|---|---|---|
| Contribution per coffee | 4.50 − 1.35 | $3.15 |
| Coffees per month | 3,200 ÷ 3.15 = 1,015.9 | 1,016 |
| Coffees per day | 1,016 ÷ 26 = 39.1 | 40 |
| Sales per month | 1,016 × 4.50 | $4,572 |
At 40 coffees a day you cover everything, but you earn nothing. If you want to take home $2,500 a month, add it to fixed costs: 5,700 ÷ 3.15 gives 1,810 coffees, or 70 a day. That is the number that matters, and the guide to paying yourself helps you choose it.
Now say your card reader takes 2% of each sale. Put 2 in the commission field: each coffee leaves $3.06 instead of $3.15, and break-even rises to 1,046 coffees a month.
How to use the result
- Compare it with what you sell today. If you sell 32 a day and need 40, working longer hours rarely closes the gap. The price, the cost or the mix has to change, for example by selling more pastries alongside the coffee.
- Test changes before you make them. Try $4.80 in the calculator and see how many fewer coffees you need. Cut the variable cost by 10 cents and compare.
- Recalculate when something big changes. New rent, another wage or a jump in milk prices all move the number.
The guide to break-even covers the method with more cases, and the one on contribution margin helps you work out what each item really leaves you.
For the full cost of a product, with ingredients, packaging, your time and the gas, use the food cost calculator.
Frequently asked questions
Does break-even include my own pay?
Only if you put it in fixed costs. Leave it out and you work for free at break-even. Add what you want to take home each month to fixed costs and see how many units you need then.
What if I sell lots of items at different prices?
Use an average price and an average variable cost from your best sellers, or run it for your main item. For a finer answer, take your average contribution margin for the month and divide fixed costs by it.
Why does the tool round up?
Because if the answer is 1,015.9 coffees, selling 1,015 still leaves you short. You cannot sell part of a coffee, so the result always goes up to the next whole number.
Where do card fees or app commissions go?
In the channel commission field, as a percentage of the price the customer pays. If only some sales pay a fee, use a blended average or run each channel separately.